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The unchecked market power of Google and Facebook is posing a threat to traditional media and risks harming consumers, Seven West Media has warned the Federal Government.

In a submission to the Australian Competition and Consumer Commission’s inquiry into the impact of digital players on traditional media, SWM, publisher of The West Australian, has seized on the Cambridge Analytica data scandal to warn of the risks associated with the amount of consumer information being amassed.

“It is clear that regulators need to do more to investigate and shine a light on the behaviour of these two companies in data collection, and to consider whether the existing regulatory regime is sufficient to protect the interests of users,” the submission says.

The ACCC inquiry, which is due to report to the Federal Government in December, is looking at the impact of digital search engines and social media platforms on media competition in Australia, with particular reference to the supply of news and journalistic content.

SWM chairman Kerry Stokes has warned that Google and Facebook have “frightening” market power, controlling 80 per cent of the global digital advertising market, but are not subject to the same regulatory constraints or rigorous auditing as traditional media companies.

The network has proposed that the advertising claims of the two companies be subject to third-party scrutiny and a government-endorsed metric so advertisers have reliable consumer-reach information.

SWM has also raised concern about the two internet behemoths using content produced by traditional media free of charge, which they then monetise through advertising revenues. To address this inequity, SWM is proposing a collective licensing arrangement for third-party content supplied through digital platforms.

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“There is no reason why digital platforms, whether general search engines or social media platforms, should be using traditional media content without payment,” the submission says.

“Unless some mechanism is introduced to address this issue, the distortionary effect in content markets will continue.”

SWM is one of the country’s biggest producers of Australian content, and one of the few significant producers of local content that is Australian-owned.

The submission notes that commercial free-to-air broadcasters spend about $1.5 billion on Australian content each year.

SWM warns that its role as a supplier of news and journalistic content, based on its ability to maintain viability across all its media platforms, “is becoming challenging in the current climate”.